BioPharma Solutions to go to Advent International and Warburg Pincus for $4.25 billion

Deer­field, Illi­nois; Boston, Massa­chu­setts; and New York, N.Y. — Baxter Inter­na­tio­nal Inc. (NYSE:BAX), a leading global medi­cal tech­no­logy company, today announ­ced that it has signed a binding agree­ment to sell its BioPharma Solu­ti­ons (“BPS”) busi­ness to Advent Inter­na­tio­nal (“Advent”), one of the largest and most expe­ri­en­ced global private equity inves­tors, and Warburg Pincus, a leading global growth investor.

Baxter will receive $4.25 billion in cash under the agree­ment. Net proceeds after taxes are curr­ently esti­ma­ted at appro­xi­m­ately $3.4 billion. The tran­sac­tion is expec­ted to close in the second half of 2023 and is subject to custo­mary regu­la­tory appr­ovals and the satis­fac­tion of other closing condi­ti­ons. Baxter intends to use the after-tax proceeds to reduce debt, consis­tent with the company’s stated capi­tal allo­ca­tion objec­ti­ves. For the full fourth quar­ter of 2023, Baxter expects the tran­sac­tion to reduce net income by appro­xi­m­ately $0.10 per share, with the total amount depen­dent on the timing of the tran­sac­tion closing. It is assu­med that this amount will be parti­ally offset by lower inte­rest payments as a result of the expec­ted debt repayment.

“Today is an important step in Baxter’s ongo­ing trans­for­ma­tion. It enables us to execute on our stra­te­gic prio­ri­ties, streng­then our focus and create addi­tio­nal value for all of our stake­hol­ders,” said José (Joe) E. Almeida, chair­man, presi­dent and chief execu­tive offi­cer at Baxter. “BPS has long been reco­gni­zed globally as a trus­ted and proven part­ner for services in the phar­maceu­ti­cal and biotech indus­tries. Advent Inter­na­tio­nal and Warburg Pincus have exten­sive expe­ri­ence working with inno­va­tive health­care compa­nies to help them achieve their goals and stra­te­gic prio­ri­ties. I am confi­dent that under their leader­ship, BPS will conti­nue to build on its leader­ship posi­tion, nurture its world-class work­force, invest in new skills and capa­bi­li­ties, and deli­ver modern as well as high-quality solu­ti­ons to its clients.”

BPS has been a leading provi­der of sterile manu­fac­tu­ring solu­ti­ons, paren­te­ral deli­very systems and custo­mi­zed services to the phar­maceu­ti­cal and biotech indus­tries for deca­des. As a stand-alone company and in part­ner­ship with Advent and Warburg Pincus, BPS will act as a leading inde­pen­dent end-to-end CDMO, offe­ring its clients a compre­hen­sive port­fo­lio of services from clini­cal rese­arch to commer­cial explo­ita­tion. BPS is well posi­tio­ned to acce­le­rate its go-to-market stra­tegy and clini­cal deve­lo­p­ment pipe­line, increase manu­fac­tu­ring scale and drive further product inno­va­tion. The propo­sed tran­sac­tion includes BPS’ manu­fac­tu­ring faci­li­ties and appro­xi­m­ately 1,700 employees in Bloo­ming­ton, Indiana, and Halle (West­pha­lia), Germany. BPS is expec­ted to gene­rate reve­nues of appro­xi­m­ately $600 million in full-year 2023.

“BPS is a premier company at the fore­front of the bio-pharma indus­try that we have been follo­wing closely for a number of years,” said John Maldo­nado, Mana­ging Part­ner at Advent (Photo © Advent) . “We believe this part­ner­ship will provide nume­rous growth oppor­tu­ni­ties through our deep indus­try know­ledge and exten­sive stra­te­gic resour­ces. We will help the company realize its full poten­tial and provide a high-quality, specia­li­zed and compre­hen­sive range of services to well-known custo­mers, inclu­ding Baxter, as a stand-alone company. We are exci­ted to part­ner with BPS and help its custo­mers deli­ver life-chan­­ging thera­pies to pati­ents around the world.”

“BPS’ success and excel­lent repu­ta­tion in the phar­maceu­ti­cal sector posi­tion the company well to further expand its parti­cu­larly rele­vant services in a variety of thera­peu­tic areas, inclu­ding onco­logy, meta­bo­lic dise­a­ses and infec­tious dise­a­ses,” said TJ Carella, Mana­ging Direc­tor and Head of Health­care at Warburg Pincus. “We are plea­sed to be working with Advent and the outstan­ding team at BPS, which has impres­sive exper­tise and has built an indus­­try-leading repu­ta­tion for quality and relia­bi­lity in the paren­te­ral drug supply chain.”

“We stron­gly believe in the company’s mission to part­ner with phar­maceu­ti­cal compa­nies around the world to provide the scien­ti­fic exper­tise, sterile solu­ti­ons and perso­na­li­zed support needed to address today’s major health­care chal­lenges. We look forward to conti­nuing the strong busi­ness that Baxter has built at BPS,” added Ruoxi Chen, Mana­ging Direc­tor at Warburg Pincus. “This invest­ment unders­cores our commit­ment to working with compa­nies deve­lo­ping inno­va­tive life scien­ces products and services around the world.”

“BPS has been excep­tio­nally successful in provi­ding high-quality services and products that meet the unique needs of phar­maceu­ti­cal and biotech clients world­wide,” said Carmine Petrone, mana­ging direc­tor on Advent’s Health­care team. “Toge­ther with our part­ners at Warburg Pincus, we have an exten­sive track record in carve-outs. We intend to leverage this expe­ri­ence in crea­ting a scalable, diver­si­fied plat­form to capi­ta­lize on the signi­fi­cant market oppor­tu­nity. We look forward to support­ing BPS’ contin­ued growth as the company does its part to bene­fit pati­ents around the world and conti­nues to help its custo­mers achieve their commer­cia­liza­tion goals.”

Advent has been inves­t­ing in the health­care sector for over 30 years. The private equity firm has made more than 50 invest­ments in 17 count­ries world­wide across a range of sub-sectors, inclu­ding phar­maceu­ti­cals, life scien­ces and medi­cal devices. Advent’s recent invest­ments in the health­care sector include Iodine Soft­ware and RxBe­ne­fits. In global phar­maceu­ti­cal services, Advent most recently inves­ted in BioDuro, GS Capsule, ICE Group, Suven Pharmaceuticals/Cohance Life­sci­en­ces and Syneos Health.

Since its incep­tion, Warburg Pincus has inves­ted more than $16 billion in more than 180 health­care compa­nies, inclu­ding Summit Health, Moder­ni­zing Medi­cine, Ensem­ble Health­care Part­ners and Global Health­care Exch­ange. Warburg Pincus is an active inves­tor in the life scien­ces sector and has inves­ted in Poly­plus, Norstella, Sotera Health and Bausch + Lomb, among others.

Perella Wein­berg Part­ners is acting as finan­cial advi­sor and Sulli­van & Crom­well is acting as legal coun­sel to Baxter. Moelis & Company LLC and Truist Secu­ri­ties are serving as finan­cial advi­sors and Cleary Gott­lieb Steen & Hamil­ton and Ropes & Gray are serving as legal advi­sors to Advent and Warburg Pincus.

About Baxter

Every day, milli­ons of pati­ents, care­gi­vers and health­care provi­ders rely on Baxter’s leading port­fo­lio of diagno­stic, criti­cal care, renal, nutri­tion, hospi­tal supplies and surgi­cal products used in homes, hospi­tals, physi­ci­ans’ offices and long-term care faci­li­ties. For more than 90 years, we have been at the criti­cal inter­sec­tion where medi­ci­nes and systems that save and sustain lives meet health­care provi­ders who make them happen. With products, digi­tal health solu­ti­ons and thera­pies available in more than 100 count­ries, Baxter employees world­wide are buil­ding on an exten­sive legacy of medi­cal inno­va­tion and driving the deve­lo­p­ment of impro­ved thera­pies. To learn more, visit www.baxter.com and follow us on Twit­ter, Linke­dIn and Facebook.

About Advent International

Foun­ded in 1984, Advent Inter­na­tio­nal is one of the largest and most expe­ri­en­ced global private equity inves­tors. The firm has inves­ted in more than 405 private equity invest­ments in 42 count­ries and had more than $92 billion in assets under manage­ment as of Decem­ber 31, 2022. With 15 offices in 12 count­ries, Advent has built a globally inte­gra­ted team of more than 290 private equity invest­ment profes­sio­nals in North America, Europe, Latin America and Asia. The company focu­ses on invest­ments in five core sectors, inclu­ding busi­ness and finan­cial services, health­care, indus­trial, retail, consu­mer goods and leisure, and technology.

After 35 years in the inter­na­tio­nal invest­ment busi­ness, Advent conti­nues to take the approach of working with manage­ment teams to deli­ver sustainable reve­nue and earnings growth for its port­fo­lio compa­nies. www.adventinternational.com

About Warburg Pincus

Warburg Pincus LLC is a leading global growth inves­tor. The company has more than $80 billion in assets under manage­ment. The company’s active port­fo­lio compri­ses more than 250 compa­nies and is highly diver­si­fied by growth phase, indus­try and region. Warburg Pincus is an expe­ri­en­ced part­ner for manage­ment teams seeking to build long-lived busi­nesses with sustainable value. Foun­ded in 1966, Warburg Pincus has laun­ched 21 private equity and 2 real estate funds that have inves­ted more than $109 billion in over 1,000 compa­nies in more than 40 count­ries. The company is head­quar­te­red in New York and has offices in Amster­dam, Beijing, Berlin, Hong Kong, Hous­ton, London, Luxem­bourg, Mumbai, Mauri­tius, San Fran­cisco, São Paulo, Shang­hai and Singa­pore. www.warburgpincus.com